Bloomberg Surveillance · Wednesday, September 2, 2026
The Chief Investment Officer at Citi Wealth explains their firm's long-standing underweight position on bonds, citing a belief in a sustainable economic expansion. They also point to the significant fiscal deficit as a factor, expecting inflation to remain above the Fed's target even with policy tightening.
“Look, we've been underweight bonds for a good period of time, for the duration of my time as CIO at Citi. And we have continued to say, like in all of our investment committee meetings, are we now at a point where we want to add duration back into the portfolio, where we want to get to a more neutral position? And we just can't make the case, frankly.”
“In fact, we think the economic data remains very strong, that we're in a sustainable expansion. But combined with that, the fiscal deficit story is no joke. And I think investors are not wholly focused on it, but they're also aware of it.”
“And our expectation is that even if the Fed starts the path of policy tightening, that we're going to stay at a rate of inflation that is above Fed target for a while. It's going to take time for that, any interest rate moves, the blunt tool to.”